The Pros Of Hosted Phone Systems

Did you buy software from my company? Want to call me and yell because you just got an error message?That's nothing new. But please know: My office is outside of Philadelphia. My phone system is somewhere near San Jose, Calif.

Over a year ago I made a case for renting a phone system. Now I want to elaborate. Not because things have changed, but because it's worthwhile to dig into this technology. A hosted phone service makes sense for a lot of small businesses, particularly mine.

Back in 2004 my 10-person company used to have offices--and people working in front of computers fixing software errors. I was paying $2,000 per month in rent and $1,000 per month for the
Avaya
phone system we leased. I started to wonder why. No clients ever visited. Most of our service people were out on the road. The people in the office could do their work from their own homes.

So in the beginning of 2005 we closed our offices and everyone worked from home. I stuck two servers in the basement of my house and we did our work over our Virtual Private Network. I got rid of the Avaya phone system and replaced it with a hosted phone service called Virtual PBX.

Virtual PBX is not a client of ours. I have never done any work with this company. There are other good companies like Grasshopper that also provide hosted phone services. For over five years we've used Virtual PBX's hosted phone services with hardly a hiccup. Here's how the technology has worked for my company:

I signed up for the service over the Web. I was given the option of porting over our existing phone number or adding a local toll-free or international number (I added a toll-free number). I chose the number of extensions (i.e., voicemail boxes) we needed and coughed up my credit card number. After extensions were assigned to my people I sent them all instructions for configuring their phone lines over the Web. After a few days I was shut off my existing phone system because the calls weren't going there anymore; they were going to Virtual PBX.

You call our toll-free number. An automated attendant answers the phone (I could change the voice here, but the guy who answers sounds Southern California mellow, and in my business we need our clients to be mellow, too). You're given the choice of "sales" or "service" (I could offer other choices too but really, what else is there in life?) or you can choose the dial-by-name directory. You can leave a message. If you wait to get me on the line, the call is automatically routed to my cellphone (I can choose to route calls to whatever number I want).

Beware: The system provides caller ID. So if you're phoning in to verify our weekly payroll, sell me insurance or work in the disciplinary office of my son's high school, you're most likely going straight to voicemail. The service stores the messages online and also sends me a text message and an e-mail with the voicemail attached as a media file. Because I set up my cellphone with Google's Voice system, those messages are also stored online and sent to me via text and email, too. Nothing falls through the cracks. All of my employees can individually configure their extensions the same way.

There have been a few times when clients have complained that no one answered their call to my extension. I haven't been able to replicate that issue. And the text message notifying me of a new voicemail doesn't include a transcription of the message like Google's voice system does. So even though I know my son's in trouble at school I have to actually listen to the message to find out why. Usually, it involves water balloons. And paint.

My biggest complaint is when I do decide to answer the call after it's been transferred to my cellphone. When I do, there's always a little bit of a lag, so conversations are kind of jilted. The lag is not a game changer, but the person on the other line gets the impression that's something's a bit ... delayed. And the sounds of fans screaming behind me usually tip off the caller that they've been transferred to another phone, and not my desk extension. This may be due to my cellphone or the fault of Virtual PBX. I never really got to the bottom of this issue. Usually when I pick up a call transferred to me from Virtual PBX I make up some excuse and then call the person right back. It not only sounds better, but it also saves on costs.

Virtual PBX, like its competitors, makes money from monthly fees and minutes used. For example its plan for 10 extensions costs about $25 per month plus about $.06 per minute for any minutes over 1,000. This is for calls received from the outside. For a company of 10 people, those thousand minutes can be used up pretty quickly. I haven't figured out when the clock actually starts ticking (When the call hits the system? When it's answered?). Even so, compared to what I was spending on my old system the savings is ... wow.

There are other features I don't really use. There's conference calling (we use freeconferencecall.com) and there's faxing (we use efax.com). If you've got a more significant customer service operation, you can set up queues for calls, but I never really tried to figure that out. You can transfer calls between extensions or outside lines, too. There are a bunch of reports detailing phone activities for my company and individual people. I'll get to those once I work through that pile of old PC Week magazines.

Are hosted phone systems good for just about every small business? Frankly, yes. There's no hardware. You can give an extension to that sales guy in Tupelo, Miss., and he'll get his calls directly or sent to him any number of ways. Having been a user for five-plus years I can't really complain about the reliability. If I wake up one morning and find that Virtual PBX has disappeared, I'll port my number over to one of their competitors and go with it from there. They'll take those school disciplinary calls about my son too, right?

Gene Marks is owner of Marks Group, a technology consulting firm, and author of In God We Trust, Everyone Else Pays Cash--Simple Lessons From Smart Business People.